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US: Official to Plead Guilty in Iraq Contract Scheme

Robert J. Stein Jr., a former contracting official for the Coalition Provisional Authority in Iraq, acknowledged his role in the conspiracy in a signed statement that has been filed with the court.

by Mark ShermanAssociated Press
February 1st, 2006

A former U.S. occupation official in Iraq has agreed to plead guilty to conspiring to steal more than $2 million in reconstruction money and award contracts to a businessman in exchange for more than $1 million in cash and goods.

Robert J. Stein Jr., 50, of Fayetteville, N.C., is scheduled to enter his guilty plea in U.S. District Court in Washington on Thursday. Stein, a former contracting official for the Coalition Provisional Authority in Iraq, acknowledged his role in the conspiracy in a signed statement that has been filed with the court.

The businessman, Philip H. Bloom, also faces federal conspiracy and money laundering. Bloom is not named in Stein's statement, but has been identified elsewhere by prosecutors and is federal custody in Washington. Five U.S. Army Reserve officers also have been implicated in the theft and kickback scheme, according to court papers.

Rita Bosworth, a Federal Public Defender in Washington who is representing Stein, had no comment Wednesday.

Stein, who has an earlier federal fraud conviction, used the money he stole or was paid by Bloom to buy a single-engine Cessna airplane, a top-of-the-line Porsche and other cars, grenade launchers, machine guns, diamond rings and other jewelry, and property in North Carolina, he said in his signed statement.

Stein said he helped steer more than $8.6 million in contracts to companies controlled by Bloom, a U.S. citizen who has lived in Romania for many years. The contracts were for less than $500,000 each, the limit of Stein's authority as the top contracting official in Hillah, 50 miles south of Baghdad.

Projects won by Bloom's companies included a new police academy for Hillah and renovation of the public library in nearby Karbala. Bloom's Romanian-based companies are Global Business Group, GBG Holdings and GBG-Logistics Division, prosecutors have said.

The statement includes frank e-mails between Stein and Bloom about payments and phony bids for contracts. "I love to give you money," Stein wrote after approving a $200,000 contract for the police academy in January 2004.

In another exchange, Stein apologizes for being "businesslike" and cautions Bloom to avoid using the same company name on all contract bids, which could arouse suspicion. Bloom agrees, adding, "Since we are paid in cash it really doesnt matter tax wise."

Bloom supplied Stein and others with "business class and first class plane tickets, watches and other jewelry, alcohol, cigars, sexual favors from his villa in Baghdad, and money laundering services," for the stolen reconstruction funds, the statement said.

The U.S.-controlled CPA ran Iraq from shortly after the March 2003 invasion until June 2004. It had final say over spending from the Development Fund for Iraq, made up mainly of Iraqi oil revenues.

The case against Stein has its roots in audits performed by Inspector General Stuart W. Bowen Jr., who is looking into Iraqi reconstruction contracts.

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